Bitcoin was the best performing asset of the last decade, and in 2020, it remains a winner again.
Compared to the S&P 500 hitting a new record with just 2.09% returns YTD and gold also reaching a new peak with 22.2% returns, Bitcoin is still 46.5% away from its all-time high but up 49% in 2020 so far.
As such, it makes sense that Bitcoin is Chamath Palihapitiya’s best bet.
The chairman of Virgin Galactic and a stakeholder at Warriors, this week, Palihapitiya took to twitter to impart some investment knowledge.
In his investment 101, he talked about taking time to understand that you own so that you can go “all in.” “Don’t confuse slugging percentage with batting average,” he said.
During this, he provided the example of Bitcoin, “I’ve made some great bets before, but nothing compares to my bitcoin bet in 2012 and sizing up…” with an added “PS, HODL.”
Recently, Palihapitiya revealed in the investor call of his company Social Capital that it has been a bitcoin investor since 2013. Here he compared BTC to the early days of Amazon and Tesla, with “great asymmetric upside which can 10x in 10 years.”
In another of this Twitter thread, Palihapitiya discussed an investment portfolio. Conventionally, investment for retirement was 60% equities and 40% bonds, which got the job done in the 80s, 90s, and 00s.
But now, in the world of zero and negative interest rates, bonds return zero, calling for a new addition.
Here, he suggested, one idea is to replace the bonds by increasing the exposure to alternative assets such as “crypto, cars, art, baseball cards,” and others.
“Most people have 0-5% in alts. This allocation will probably change if bonds remain at 0…it’s just the math,” he said.
Bitcoin Struck a Nerve
Big players and companies are slowly but increasingly turning to the leading digital currency, as we have seen this year with the likes of Paul Tudor Jones and MicroStrategy.
Bitcoin actually “struck a nerve” when the halving happened, the programmatic supply reduction – a completely predictable boring thing, the same time as the money printer went burr, said former macro hedge fund manager Raoul Pal.
The bitcoin proponent believes BTC to be “a priceless reserve and collateral asset.” Earlier this month, he revealed that more than 50% of his investment is in bitcoin.
In a recent interview, he also talked about a bitcoin exchange-traded fund (ETF), which, according to him, is imminent and advised not to miss the “opportunity of a lifetime.”
“You’re allowed to front-run in Bitcoin, and I’m going to give you the biggest front-running opportunity of your life: they will get an ETF across the line. There will be billions of dollars that pour into it,” he said.
He expects “every” pension plans and family offices to allocate some of their money to it and from there, “the more the price goes up, the more they will allocate,” providing the retail an opportunity to “front-run the institutions for once as opposed to Goldman Sachs front-running us.”